In response to growing scrutiny, Hamster Kombat, the Telegram play-to-earn game, has denied any collaboration with Gotbit, a crypto market maker currently involved in a U.S. fraud investigation.
This clarification follows reports that the CEO of Gotbit Consulting has been arrested and may face criminal charges.
The Gotbit’s Market Manipulation Scandal
The arrest, reportedly tied to Gotbit’s involvement in manipulating token prices, has sparked concern within the crypto community.
While the U.S. Department of Justice (DOJ) has yet to confirm the details of the arrest, Hamster Kombat’s team took to X to assure its users of its commitment to transparency.
Dear CEOs,
We are committed to ensuring transparency within the Hamster Ecosystem.
In light of recent news regarding Gotbit, we want to clarify that Hamster Kombat has never worked with Gotbit as a market maker.
— Hamster Kombat (@hamster_kombat) October 12, 2024
The statement emphasized that Hamster Kombat “has never worked with Gotbit as a market maker,” seeking to distance itself from the controversy.
The need for Hamster Kombat’s clarification stems from the recent charges filed by U.S. federal prosecutors against several crypto market makers, including Gotbit Consulting.
The DOJ, SEC, and FBI allege that Gotbit manipulated the prices of several tokens, including Bonk and Neiro, inflating their value to deceive buyers.
Gotbit is accused of artificially boosting these tokens and negotiating lower exchange fees to maximize profits.
Gotbit’s CEO, Aleksei Andriunin, has since been arrested in Portugal as part of the investigation.
The company reportedly managed over $1.3 billion in assets and provided market-making services to over 50 projects, many of them meme tokens.
Despite Hamster Kombat’s denial of its ties to Gotbit, the crypto community remains skeptical.
In April, Gotbit publicly announced a partnership with Hamster Kombat, congratulating the project for reaching a million players.
This announcement has led many to question the accuracy of the game’s recent denial.
Some community members have pointed to past investigations, such as those by on-chain detective ZachXBT, who had previously warned about Gotbit’s questionable market-making tactics.
I would be weary of any projects you see working with the market maker @gotbit_io as a leaked report shows highly questionable services offered.
Gotbit claims:
“During the first minutes in the price discovery stage we are going to push the price up to 10x to create FOMO and… pic.twitter.com/ndvrNlG3VW
— ZachXBT (@zachxbt) September 24, 2023
Even with these warnings, projects continued to work with the firm, increasing the doubts surrounding Hamster Kombat’s latest statement.
Gotbit now faces severe legal consequences. The DOJ has announced potential fines of up to $5 million or double the illegal profits gained. Additionally, Gotbit’s CEO may face up to 20 years in prison if found guilty of the charges.
The article was edited to remove the false claims that Hamster Combat CEO was arrested.